Algeria’s deepening domestic and diplomatic crises impact currency

Following years of unending diplomatic crises and worsening economic conditions at home,Algeria’s currency has fallen to unprecedented levels against the Euro in the country’s black market,the genuine metric for the country’s financial health.

Demand on foreign currencies as an investment option surged due to uncertainties caused by the regime’s policies both at home and abroad.

Algerians feel a steep fall of the dinar amid reports of a return to money printing to face a shortage in revenue due to prospects of a falling oil price below $60 per barrel,following OPEC output increase decision.

As the government braces for a historic fiscal deficit,Algerians fear a surge in inflation amid omens for more import restrictions.

Goods such as cars,foodstuff and medicine have been hit by import restrictions since 2020 as the government tries to curb the outflow of hard currency.

The oil and gas dependent Algeria has done little to diversify its economy and remains hostage to price fluctuations.

With a dim outlook,Algerians resort to the black market where demand for foreign currencies is also influenced by an increasing isolation of Algeria globally.

Crises with major trading partners like France left many Algerians worry about their economic future,expecting a drastic decision and preparing savings in hard currency.